Is a market based solution suitable to save the River Kennet, in Marlborough, Wiltshire, UK?

The River Kennet is one of England's most important chalk streams. Some 45 miles long, it is the largest tributary of the Thames and in summer months contributes up to half its flow.
On Friday September 30th, the minister for the Natural Environment and Fisheries, Richard Benyon met Geoffrey Findlay and Charlotte Hitchmough from Action for the River Kenent in Marlborough to discuss the low flows in the river Kennet, and the on-going issue of over-abstraction. Local MP Claire Perry also attended the meeting and made clear to the minister that her in-box was full of letters expressing dismay at the poor state of the upper Kennet. Claire offered such help as she could give to support ARK in its campaign to reduce water abstraction.

As he stood on the bridge overlooking a dried out section of the river, Richard Benyon agreed that the state of the Kennet was 'very worrying'.

Jan 25 2012:
Maybe some kind of market mechanism involving tradable permits, such as that used in carbon emissions schemes could be effective? Until an incentive scheme exists, companies won't take action. Regulation is not an approach that will return long term benefits, as there is no incentive to search for a greener, cleaner approach that will REPLENISH the river. Internalising the externality is only half the battle, the authorities should be a little more creative and seek a solution that incentivises both households and companies to not only reduce consumption, but replenish sources. It's not enough to put a brick in the cistern!

Jan 25 2012:
i think that instead of having that second glass of water in norwood we should pour it into theriver then it will be flowing with drinking water which we can drink as well after games in the summer?!?!?!?

Jan 25 2012:
Walking over the River Kennet on a daily basis has opened my eyes to the damage and destruction Thames water is causing to our local community. Not only are they decreasing the aesthetics of this outstandingly beautiful rural part of the shire but more to the point they are ruining and bringing to an end numerous young and unfulfilled lives (of the fish). Now, I wouldn't consider myself an economist but you people seem to know what you're talking about and Im not sure what the solution is but what you're suggesting seems to be along the right lines. Based on my limited knowledge I think that the market based solution will internalise the negative externality being created here, but what do I now?! Go get 'em guys! SAVE THE RIVER KENNET!! Xx

Jan 25 2012:
Internalising the externality is only half the battle, the authorities should be a little more creative and seek a solution that incentivises both households and companies to not only reduce consumption, but replenish sources. It's not enough to put a brick in the cistern!

Jan 25 2012:
It is not only the river that needs to be sorted. Should firms be stopped from extracting water, there needs to be another solution so their water needs can be met in a sustainable manner.

Jan 25 2012:
An incentive to conserve water rather than abstract it needs to be established. Perhaps water permits??
However, seeing that the River Kennet is primarily short of water due to a lack of rainfall. There is no market solution to increase the amount of rain so its suitability is questionable.

Jan 25 2012:
Maybe some kind of market mechanism involving tradable permits, such as that used in carbon emissions schemes could be effective? Until an incentive scheme exists, companies won't take action. Regulation is not an approach that will return long term benefits, as there is no incentive to search for a greener, cleaner approach that will REPLENISH the river.

Jan 25 2012:
Incentives must be created to stop companies from withdrawing water from the stream. For example, rewards for not taking water from the stream. These methods would be effective in both the short and long run but are not very cost effective.